Robinhood SWE Turned $1B+ Founder on Non-Linear Careers, Being Jaded About Promos, Startup Learnings

20:09Robinhood was the place where everyone was going to trade. And then I think it was like January 28th of 2021. Robinhood just turned off buys on all these meme stocks. And it was insane because I found out about it when I woke up and I was like, damn, this is crazy. And then that day, there were so many people that just reached out to me like, yo, man, what the hell is going on? Because a lot of them, I think, were actually financially invested in this as well. And when Robinhood turned off buys, the price of GameStop started to go down. So they were like, understandably, like quite pissed about that.

20:38And yeah, I mean, it just makes you feel super powerless when you're an insider at a situation like that. And one thing that I realized is just how, that really reinforced me just how archaic our current financial system is. In the case of Robinhood, that happened because there's this concept of T plus two settlement that back then it used to take two days for trades to settle. And during this time, Robinhood needed to have collateral for the positions that people were opening. So they needed to actually give counterparties like billions of dollars on January 28th if they wanted to let people keep trading these assets.

21:08And like normal people don't know about any of that stuff. And it only exists because these are like the ramifications of the traditional financial system that was built like whatever. The current version, I think, was built like 40 years ago, for example. It kind of made very clear to me that we will need much better financial rails in the future. And that was one of the things that led to the inspiration for Sayer.

21:26The Peterman Pod Host:Oh, that's interesting. So because I remember that moment when they turned off the buys. And I think the public narrative was that they were doing it on purpose to manipulate the price. but it sounds like you're saying it was just logistical. They just couldn't support the trades. Yeah, so Robinhood did not turn off the buys because they were trying to like fuck with the price or whatever. They did turn off the buys because they needed to put up more collateral. And I think they miscommunicated this potentially on purpose. Like they were saying that like we didn't turn off the buys for XYZ, even though that was actually the case.

22:04And I think that's because they were actively fundraising because they needed to raise billions of dollars at that same time. So it was like this really difficult thing that Vlad and Beiju were trying to do at the time. I don't know what the right way to do that would have been because it was basically they were fighting for their company's existence at the time in a way, especially when regulators didn't really like them to begin with. So things could have gone very, very wrong over there. So I think all things considered, they did navigate that in an okay way, but I think they could have communicated to the public a lot better.

22:33The Peterman Pod Host:Okay, so it sounds like you were getting promoted, but you were disengaged and trying to leave. What's the story behind you eventually leaving and wanting to start a startup? Yeah. So, I mean, from a, I mean, growing up in Silicon Valley, the people that are the most respected there are not like sports stars or like Hollywood stars. It is basically entrepreneurs. Like growing up, everyone would talk about like Steve Jobs, for example, instead of like Madonna or whatever. And yeah, I mean, I think everyone, if you're growing up in Silicon Valley, like consider starting something at some point. in my case I did that Kleiner Perkins fellowship where it seemed a lot more accessible in a way like there were a lot of folks there that had started their own companies or a lot of folks that are considering starting it so I think being surrounded by that kind of group when I was 21 I was like okay it's doable to start something and then in 2019 me and my co-founder my current co-founder we decided to actually start trying to build things together so this is like after promotion didn't work out.

23:34I'm like, what should I do with my life? So nights and weekends, we're basically trying to get this like AWS cost management startup off the ground. And it's such a boring, boring space to be in because literally your job is to help people cut down on cloud costs. And what that means is if there's a super high growth company, they're not going to be interested in working with you because they're growing so quickly that it'll be easy for them to raise more money in the future. So the only kind of companies that you can really work with are ones that are like kind of atrophying in a way. And because we're small, it's not even going to be like the big companies that are atrophying that would work with us.

24:09It'd be like these series A, series B companies that have kind of stalled out in growth and need to start cutting their cost. That's a horrible customer to have. Like that's not someone that you want to really build your business off of. So yeah, I mean, we didn't find too much traction with that. Honestly, thank God for that because I don't think I would have liked spending several years of my life working on that. That's like the first thing that we did back in 2019. Then 2021, we decided to like start spending a lot more time in crypto. There are different ideas that we kind of looked into, but ultimately what we decided we wanted to do was building something like Robinhood, except building it in a decentralized way.

24:43And the thinking is that if it was built in a decentralized way, you'd be able to solve all the issues that were happening with the Robinhood saga, like the GameStop saga that we're talking about. And that led to us initially building a central limit order book based exchange on chain. And I guess I'll avoid going too deep in the details over there. But essentially, we're initially trying to build an exchange, which is an application. Then we realized it's actually better to build the infrastructure for that application, which led to say. And that's around when I quit my job and we just went kind of all in on it.

25:15What did you need to see before you went all in? So in our case, we had basically a team of people that was like willing to work part time with us. I think that helped. We had a good relationship, me and my co-founder. And I think that we started seeing some initial kind of excitement around what we're building. And that's when I kind of pulled the trigger. I think my bar for pulling the trigger was lower than it would be for a lot of other people. Because like the IPO just happened financially, there wasn't much downside for me to do that because I was hitting the end of my four year grant anyway.

25:45So I was like, this is the time. and in hindsight that was like a fantastic time to kind of pull the trigger.

25:53The Peterman Pod Host:Imagine that Robinhood had a, like compensation wise, let's say it had a middling performance or like it was just, you know, normal. It's as if you hadn't like worked at Google or like a big tech company. Do you think you still would have left to start your own company with the same conviction or do you think that money is a big part of that? I think it would have been even easier to make that decision. honestly, because the six months of equity that I left on the table was still a dollar value that was pretty high to me. If it had been like a normal kind of compensation that I'd be leaving on the table, I don't think it would have been a hard decision at all.

26:32In general, I think people tend to be way too scared of leaving their jobs. Most of the time, if you're like competent, things will work out anyway. Like I don't know too many people that are like, that are good at their jobs at company A that are not able to find any work again after that. Actually, I don't know anyone like that um typically if someone's good at company a they have no trouble finding a job somewhere else um so yeah i think people tend to over index on how much risk they're taking on

26:55The Peterman Pod Host:when they leave to start something i see i see okay so you're saying it's not that big of a deal and you can just go back or you can find another opportunity if it if it fails exactly i mean if you're a software engineer working in tech i think it's there's such little downside in a way there's just the opportunity cost for the most part if you spend like a year trying to get something off the ground it doesn't work out not only are you like i would actually say you're more valuable to a startup or like to any kind of company if you've been through the reps of actually trying to start something um then then you would expect like i think a lot of people worry that like oh yeah if i'm not working on anything like if i'm not working as a software engineer for a year then it'll be hard for me to get a job but if you're going through the reps of like actually trying to build a product you end up learning a lot more that makes you more valuable to any kind of business Like what are those things that you learn?

27:42Like, for example, getting product validation, like coming up with a product idea, being able to see if people actually care about it, then working through the entire life cycle of like designing the product, actually building it from the engineering side, going to market with it, like the marketing side around that, the business development side around that. So there's just so many things that as a normal engineer, you don't have to do it all. And in this case, you end up just learning all of that, which when you go as an engineer to any company, If you're able to play the roles of like being a marketer, being a product manager, like being a business development guy as well, I think you're able to do a much better job of building the product.

28:18And you're also able to play a much bigger role on like the eventual go to market of that product as well.

28:23The Peterman Pod Host:What about in the bear case? I guess let's say you quit your job, you are working on something where you don't establish PMF, and you don't have a, I guess, a marketable milestone in that thing that you did. But you did get the skills, but who's going to give them credibility if you just wandered and explored ideas? So I don't think big companies will give you that much credibility. I think a lot of early-stage startups would. Like if you go and interview at a startup that's like a seed or pre-seed startup, they would be very happy to work with an engineer that's been a previous founder, much more so than they would a normal engineer, just because that founder, that engineer can be much more impactful in like the zero to one process that you're getting started with.

29:09The Peterman Pod Host:Right. Okay. So it's kind of, I mean, if you do choose to make that career decision, it doesn't necessarily pigeonhole you, but your career starts to bias a little more towards smaller companies. I think smaller companies is where you're going to excel more. But I also think there's this other side of it where people that try to start a company, they're already biased towards smaller companies. So they're much more likely to only interview for these smaller companies after their startup doesn't work out. And that's going to be where there's like more interesting problems for them to work on anyway.

29:38So you probably do see more examples of that if like people leaving to start a company, failing and then going to another small company. But I don't think that's just because big companies say no. I think that's also because that's the environment that those founders want to find themselves in.

29:50The Peterman Pod Host:Yeah, no, there's definitely some confounding factors. And I've seen examples of people, big tech, left big tech, started something, failed, came right back to big tech. So, you know, you can definitely do that as well. I want to talk about fundraising because, I mean, your startup, thankfully, was successful and you raised a lot of money. I don't know the total. Maybe you could. We raised$35 million in total. We raised a$5 million seed round. And then afterwards, we had strategic rounds that ended up being for$30 million. Okay, so you raised$35 million. You must have learned something in that process.

30:30The Peterman Pod Host:I'm curious, what was that like? Yeah, so our seed round, we started raising it right after. There was this blockchain called Terra, which is one of the biggest blockchains out there. It collapsed. And then we started raising our seed round three weeks after that. That was one of the worst times in the history of crypto to be raising money. So we learned a lot about, I mean, rejection, obviously, because most investors said no to us. I mean, we obviously learned like what the end-to-end lifecycle for like fundraising looks like. We hadn't raised money before then. So like the intro calls, then eventually meeting the partners and like kind of talking through the team, the product, the vision, all that, all that kind of jazz.

31:08It's actually not that scary in a way. And there is a bunch of group things that happens. Like initially everyone's kind of like skeptical. And then once one fund becomes excited about something, it makes it much easier to convince other funds to get on board with it. And there's a lot of investors that are just like kind of on the sidelines trying to maintain as much optionality as they can. So they like give excuses a lot of the time like, oh, yeah, we're like still doing diligence. We'll get back to you in like a week or something just to see like how the deal plays out. So there is definitely that aspect of like trying to get people more excited about the investment.

31:40The Peterman Pod Host:I see. And so it sounds like the most impactful thing here is you get a good lead and then all the sheep will come. Yeah, if you get a tier one lead investor, everything else is super easy after that. So then how did you get your lead investor and what's that process look like if you're just an engineer with a product? Yeah, so in our case, we just got an intro to a bunch of different, I mean, basically every investor that's like a top tier investor in crypto. One of the funds we talked to was Multicoin. Multicoin was the biggest investor in Solana, and they've made billions of dollars from that investment.

32:15So I would say that's like, they're regarded as like one of the top five to 10 investors in crypto. And we had really good conversations with them, and they ultimately decided to invest in us. And after that investment, I think everything just became much, much easier. Because initially, when you're getting started with something, if you don't have a track record, everyone's kind of skeptical of you. But once you get that stamp, it becomes much easier to open a lot of doors, whether it's for business development opportunities, whether it's for future fundraising, whether it's for like anything required for the actual launch as well.

32:45It just becomes significantly easier. The other thing that I'll say is that for crypto, it's very different than traditional kind of venture. I think in traditional venture, it's probably even harder than it is in crypto. Because in crypto, there's like a very different type of process. there's like typically most projects have like a seed round, a series A, and then afterwards there's some kind of token launch event that happens. And then they don't typically raise like institutional like venture capital rounds too much after that. Whereas in like AI companies or like most Web2 companies, there's like several rounds of fundraising that need to happen.

33:17And there's like a lot of like revenue and like financials that people look at. In crypto, there's a lot of like softer metrics people look at, but there's not really the same concept of like revenue if you're like helping build a blockchain um and as a result of that like web2 companies like okay this is your arr and then that's like a very fundamental metric like how quickly you're going around that um in the case of crypto it's much more like how much excitement is there around this project how many teams are actually building with this so it seems reminiscent of like 1995 to 1997 um in like internet investing where there are a lot of like alternate metrics People came up with like number of eyeballs that like are looking at a website, for example, stuff like that.

34:01So I think it is much more of like a subjective space to be investing in if you're like an investor in crypto.

34:07The Peterman Pod Host:Let's say I'm a skeptical, you know, software engineer and I'm looking at crypto. I think there's a lot of grift there. What's the the bowl case or what's the clear case of here's the value that crypto provides the world? Yeah. So I guess I mean, two separate streams of thought over there. The first is that any industry that is an early stage industry, I think it tends to have a ton of grift and a ton of things that don't make sense. When Web2, when like the internet was getting started, for example, arguably the biggest use case for it was porn, right? Like that was one of the biggest things that was taking off in Web2 back in like the mid 90s.

34:44And I would make the argument that the internet has just completely changed society. So I think it does take time. And I think there does tend to be a lot of grift in any kind of new industry that's getting started. I think even with AI, we're probably seeing semblances of that, where there's like a lot of people that are raising money that aren't really building anything super meaningful. And they're probably like misusing a lot of the funds that they're getting. In crypto's case, I think, yeah, there's been a ton of events like that. And I think that we're starting to move, like those events are becoming less and less typical, I think through a couple of different things.

35:12The first, I think, is they're starting to be more and more regulatory clarity. So once the government gets involved, sets clear guidelines around like what is acceptable, what's not acceptable, I think that grift naturally goes away. And then there's also like the kind of social policing that happens as well. Like if you're seeing patterns where if people do XYZ, that results in bad things happening. Other people tend to be less supporting of like investing in founders that they think might do those kinds of things. So it's becoming much less common to see that kind of negative stuff happening, I would say.

35:42In terms of where I see crypto going. So my view on this is that crypto will be playing a very big role in changing the financial system in the future. And right now there's two things that crypto has been really, really good at. It's been really good at payments and it's been really good at trading. And the reason for that is when you have this kind of distributed ledger, it adds in a ton of cost because you're basically doing the same thing many, many times across a bunch of different machines. But the benefit of that is verifiability. So you're able to verify that you can trust whatever this computation is because you're like doing it yourself as well.

36:15So the only use case that really, really makes sense over there is finance. Like when there's actually money at stake, I think that's going to be the biggest use case where crypto can be really, really impactful. So right now, I think it's already playing a big role in terms of like international remittances from the stablecoin side. And I think in the future, like when you start seeing more and more stablecoin adoption, that'll lead to more financial rails being built up around those stablecoins. So I think in the future, like we're actually going to have some version of just completely decentralized Wall Street getting built as well.

36:45that'll be globally accessible that anyone's able to trade on and basically make use of. Another thing would be if you're in a country that doesn't have a stable currency, what do you actually hold your money in? Unless you're investing it into some kind of stock market, you don't want to be holding a currency that's inflating, let's say, 30 % in the course of a couple of days. So in that case, you'd actually want to hold on to US dollars. But if your country doesn't want you to get easy access to US dollars, what do you do? Well, crypto is becoming one of the clearly used solutions over there where people just buy USDC or USDT and they hold on to it and that's what they transact in.

37:20So I'd say that's another use case where crypto has been picking up. In Southeast Asia, Latin America, it's being used a lot more for just actual payments as well. I think that it's just starting to become more and more widely adopted over there. And yeah, I mean, I definitely think in the long term, the verifiability that crypto offers is going to be really, really useful for allowing computation to happen between people that don't trust each other, which will be like a lot of financial use cases for people basically around the world.

37:47The Peterman Pod Host:Coming to the end here, when you look back on your career, like which time do you feel like you had the most growth and why? 2022 was the year that I had the most growth, undoubtedly. And that was when you started the company? Yeah, when we, that was like the, yeah, when we started to, when you're at a job, I think there's a lot of rails there to help support you. When you start a company yourself, like you're all by yourself and you need to figure everything out by yourself. And yeah, as a result of that, I think I learned a lot. But I think basically every single year since then, I've probably learned more than I did during my, like any of the jobs that I work for other people.

38:25The Peterman Pod Host:I see. And these things that you're learning are more of like the non-engineering things. Oh, yeah. Okay. It's like, you know, how do you start a business? How do you fundraise? Exactly. I think the engineering side of things is generally pretty easy. Definitely. I mean, once you're like going up the ladder at like a meta or something, you're solving really, really difficult problems. But I don't think most businesses need, like they have those kinds of problems and they don't need support to solve those problems. Like most businesses are solving pretty mundane kind of problems. So from the aspect of like building a product that people use, I don't think you typically end up facing those kinds of scaling problems.

39:00So if you're a competent, let's say, I forget the leveling that Meta uses now, but like it probably is like L3 is like a new grad, L4 is the level above it. If you're a competent L4, then I think you can do perfectly fine as a founder in any kind of engineering side.

39:16The Peterman Pod Host:So let's say I wanted to start my own company. I'm a new grad. Would you recommend stay until you hit that minimum bar of technical competency or just go for it? If you know what you want to build, I think you should just go for it. I think you'll be able to either build that technical competency or more likely hire for that technical competency. Because if you have a good idea, you have like, and if you have a good idea, it'll be pretty easy for you to raise money. And if you raise money, then it's going to be pretty straightforward for you to grow a team from there as well. And I mean, you know, when we look back, I mean, obviously hindsight's 20-20, but your startup has been successful.

39:53The Peterman Pod Host:in how has the the team grown over the last few years and i'm curious like we can think about that compared to like maybe big tech levels and stuff and we can see what those promos kind of look like yeah so when we got started it was around i mean there were like five to seven of us this is in 2022 um now across like there's multiple entities but if you combine all the entities it's around 60 people working full-time on say. So we've been pretty lean in terms of our growth relative to what I've seen in places like Robinhood, for example. And I think that was absolutely the right decision. Like if you grow slowly, it allows you to maintain the culture and it also prevents all the scaling issues you see with like bureaucracy and people kind of being clueless on what to do.

40:39So that allows you to move more quickly as well.

40:41The Peterman Pod Host:I think the last thing that I want to ask you is, If you were to go back to yourself right when you had graduated from UCLA and give yourself some advice, knowing everything you know now, what would you say? Yeah, I mean, the main thing that comes to mind right now is to not be so scared. I think I'm naturally more of a risk-averse person. And as a result of that, I've been more hesitant to basically take these big leaps of faith. There's other people I know where it's very, very easy for them to do that. And I do think optimally, like there is some kind of middle ground where you think through any decision you make, but then afterwards you pull the trigger quickly.

41:19And I think that I shouldn't have been scared at all about leaving my job at Robinhood, even potentially earlier on.

41:25The Peterman Pod Host:So in a perfect world, actually, you would have left earlier. In a perfect world, I would have left earlier. But then I don't know if things would have played out the same way because I might not have started a crypto company in that case. And I think that it had been like that AWS cost management company. I don't think it would have been the same kind of outcome. Makes sense. Cool. Well, thank you for your time, Jay. You know, at the end of the interview, is there anything you want to plug? If you guys want to learn more about today, you could just follow the Stay Network Twitter. S-E-I-N-E-T-W-O-R-K.

41:56Thanks. Cool.

41:58The Peterman Pod Host:All right. Thanks, Jay. Thanks for listening to the podcast. I don't sell anything or do sponsorships, but if you want to help out with the podcast, you can support by engaging with the content on YouTube or on Spotify. If you want to drop a review, that'll be super helpful. And if there's any guests that you want to bring on to, please let me know. I feel like sourcing very senior ICs. There's no well studied list out there on Google that I can just search this up. So if there's someone in your org or at your company who you really look up to and you want to hear their career story, let me know and I'll reach out to them.